I keep hearing this phrase in the news related to the European markets banks that are on the verge of collapse.

'Recapitalization' I understand means 'to receive more money/capital in order to increase credit to capital ratios' that a bank must maintain in order to legally engage in fractional reserve lending. Right?

But where is this money supposed to come from?

Answer: government debt.

But who is responsible for that debt?

Answer: taxpayers.

So ineffect 'bank recapitalization' means to shift the burden of poor business decisions by some massive, too-big-to-fail banks onto tax payers instead through the act of governments simply giving/loaning trillions of dollars to banks that have proven they cannot competently compete in the free market. The banks in turn then 'restructure' their debts so they do not have to repay the loans at a reasonable rate if at all.

OK, now the follow up question:

Why do we tax payers put up with banks stealing trillions of dollars from future tax payers, our children and grand children?

While the first question puzzles me, the second question just leaves me stunned.

So ineffect 'bank recapitalization' means to shift the burden of poor business decisions by some massive, too-big-to-fail banks onto tax payers instead through the act of governments simply giving/loaning trillions of dollars to banks that have proven they cannot competently compete in the free market. The banks in turn then 'restructure' their debts so they do not have to repay the loans at a reasonable rate if at all.

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Yes, that is what TARP was to be sure. Mostly what we had to do was guarantee to cover the bad debts that were in the bank's books.

Must be nice to have the FED backing one up like that. When the banks got into debt trouble the FED became their CO-SIGNER

OK, now the follow up question:

Why do we tax payers put up with banks stealing trillions of dollars from future tax payers, our children and grand children?

While the first question puzzles me, the second question just leaves me stunned.

Reuters) - Following a now-familiar script, Europe again averted disaster in its debt crisis when German lawmakers rallied behind Chancellor Angela Merkel to approve a stronger euro zone bailout fund on Thursday.

But bigger challenges loom for the euro zone now. Financial markets are already anticipating a likely Greek default and demanding more far-reaching measures to prevent the crisis that began in Athens from spreading far beyond Europe and its banks.

The Bundestag (lower house) overwhelmingly approved new powers for the 440-billion-euro EFSF fund to make precautionary loans, help recapitalize banks and buy distressed countries' bonds in the secondary market.

Despite a rebellion by 15 backbench Euroskeptics, Merkel won 315 votes from her own center-right coalition, enough to avoid the humiliation of having to rely on the opposition Social Democrats and Greens to pass the plan.

"The result of the vote is a strong signal for Europe. The broad majority in parliament clearly shows that Germany is committed to the euro and to protecting our currency," said Hermann Groehe, general secretary of her Christian Democratic party.

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This did not fix anything. The same bad subprime mortgages are still going bad and putting banks that invested in securities containing said debt on the brink of bankruptcy and due to fail at any time. It is literally an exponentially growing problem whenone considers the leverage involved and the dirivitives that magnify every failure, like CDS that allow anyone to take a sort of insurance policy on equities one doesnt even own and so are nothing more than a gamble with other peoples money.

The Greeks will drag all the others down with them because of how the Euro zone was set up with all the banks buying bonds from each other with leverage of five to one or ten to one. Thatmeans a 20% 'haircut' will wipe out an entire investment of bonds bought at 5 to 1 or more.

The only real questionis how long the Euroman can cling to the dry root sticking out from the 1000 foot cliff while the elephant tied to his ankles gets bigger and bigger with each passing day.

I am not sure when it happened...but we lost control of America a long time ago.
We are appeased by thinking we control things by voting, which is a mere formality really.

I think to a point in the movie Gladiator...when a Senator said to another speaking of the surprising popularity of the new Emperor - "he knows what Rome is, Rome is the mob. Conjure magic for them,and they'll be distracted. Take away their freedoms and they will still cheer. The beating heart of Rome is not the marbled floor of the Senate, it is the sands of the Coliseum.

Our "sands of the Coliseum" is cable TV. Americans have lost tremendous freedoms in the past 60 years, life in America is now a comfortable, though glorified, version of an indentured slave. We are quickly becoming a society of serfdom. We get a job as soon as we begin puberty - and the vast majority will work till they die or just a couple years from it.

I cannot help but note how many of youy object to my use of the word MASTERS.

As is evidenced by EXpats implied suggestion that I am a conspiracy theorist for my having the unmitaged gall to use of that term.

Call them what pleases you, of course, but know that they are the folks calling all the shots.

And since most of us are virtually enslaved by this economic system that serves them so well, I think my choice of words to describe this relationship we have to the BANSTER class is rather fitting.

I know some of you hate to be reminded that you are nothing but pawns in the game of life, but I intend to continue rattling your chains to remind you all that you are still nothing more than peasants to the MASTERS of YOUR universe.

Those of you who imagine that you are truly FREE who don tinfoil hats, folks.

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